CGA Auditing & Assurance 2

Question 1

Which type of audit opinion is issued when financial statements are presented fairly in all material respects but contain a departure from GAAP that is not considered pervasive?

Accepted Answer

Qualified opinion

Answer

A qualified opinion is issued when a material but non-pervasive GAAP departure exists, using 'except for' language.

Question 2

Under the risk-based audit approach, which component of the audit risk model represents the susceptibility of an assertion to misstatement before considering internal controls?

Accepted Answer

Inherent risk

Answer

Inherent risk is the susceptibility of an assertion to misstatement due to error or fraud, ignoring related controls.

Question 3

An auditor discovers that management has restricted access to key documents during the audit. Which modified opinion is most appropriate if the restriction is pervasive?

Accepted Answer

Disclaimer of opinion

Answer

A disclaimer of opinion is issued when a scope limitation is so pervasive that the auditor cannot express any opinion.

Question 4

Which assertion is most relevant when an auditor is verifying that all sales transactions that occurred during the period have been recorded?

Accepted Answer

Completeness

Answer

The completeness assertion addresses whether all transactions that should have been recorded have been included in the financial statements.

Question 5

The concept of 'professional skepticism' in auditing requires the auditor to:

Accepted Answer

Maintain a questioning mind and critically assess audit evidence

Answer

Professional skepticism means maintaining a questioning mind and critically evaluating evidence without assuming either honesty or dishonesty.

(CGA) Certified General Accountant Practice Test

(CGA) Certified General Accountant Practice Test

CGA Auditing & Assurance 2